Fed’s Goolsbee and question-and-answer doesn’t talk about the economy or Fed policy (at least initially). He does say:
- Independence of the Fed is important because we don’t want inflation to come back.
- Economists unanimous that Fed must be independent from political interference.
Those sentiments are shared by most and even the president has said that he wants the Fed to be independent, but his actions and other words suggest he wants control or more control.
The 11 person list of potential Fed chair replacements seem like he is indeed flexible, but a cynic would look at it as a ploy to appear all-inclusive. The problem is that can never be proved.
More from Goolsbee as he heats up a little bit about the economy and tariffs specifically:
- Tariffs are a stagflation area shock
- He is uneasy about view of tariffs as a one-time shot that creates only transitory inflation
- Coming up are live Fed meetings (HMMM I am not sure how to interpret that comment).
- I don’t like pre-committing on rates.
- Will still get inflation readings before the next Fed meeting.
- Sharply lower job gains may reflect transition period on immigration.
- Lower job gains may just be a sign of drop in population growth.
- The danger from tariffs is that they reduce productivity growth.
Goolsbee is not a “No” but he is not a “Yes” as far as a cut in September. He is a voter in 2025.
The markets ARE pricing a cut in September (subject to change) but they seem to be ahead of the Fed which is less convinced of the need.
Prior to today’s comments, Chicago Fed President Austan Goolsbee’s recent comments reflect a cautiously optimistic, data-dependent bias with a dovish lean. He sees room for rate cuts if inflation remains under control, describing a potential “golden path” where disinflation continues without a recession. While acknowledging that recent tariffs have had less impact than expected, he remains alert to their inflation risks, which could delay easing. Goolsbee stressed that monetary policy decisions must be guided by data, not politics, firmly defending the Fed’s independence against external pressure
This article was written by Greg Michalowski at investinglive.com.